Time Bank proposes US$38bn debt bailout to Zimbabwe govt

Time Bank Holding Company has unveiled a bold proposal to lend the Zimbabwean government US$38 billion to clear national debt and compensate multiple groups owed by the State, with the loan secured through the conversion of 500,000 hectares of State-owned agricultural land into urban land.

The proposal, which builds on an initial US$35 billion loan offer made in August last year, seeks to settle longstanding financial obligations related to Zimbabwe's land reform programme and the economic disruptions that followed the 2009 dollarisation period.

According to Time Bank, the land to be converted for urban development would be drawn from the 10.8 million hectares of agricultural land acquired by the government during the controversial land reform exercise. The bank says the transformation of this land into urban properties would be carried out under provisions of the Constitution, including Sections 295, 289(c), 298(1)(b)(iii), and Section 14.

In a statement released to clarify the mechanics of the proposal, Time Bank accused the government of being non-committal and alleged that parts of its plan had been pirated despite being protected under patent law.

Under the scheme, Treasury Bonds amounting to US$38 billion would be issued by the government, backed by the value of the converted urban land. These bonds would be used to pay compensation to 13 identified groups, including dispossessed white commercial farmers, indigenous Zimbabweans who lost savings during the 2009 economic transition, pensioners, depositors, foreign investors under the Bilateral Investment Protection and Promotion Agreements (BIPPA), and international lenders.

The bonds, once issued, would be bought by a syndicate of banks led by Time Bank at a 10% discount, providing immediate cash compensation to the affected groups. This discount, Time Bank noted, was significantly more favourable than prevailing market rates which range between 20% and 85%.

After acquiring the Treasury Bonds, the banking syndicate would then use them to purchase the urban land or developed properties from the government, effectively offsetting the government's repayment obligations.

"This structure allows for the full repayment of the Treasury Bonds plus interest without the government needing to borrow from the Reserve Bank or raise taxes," Time Bank stated. "It will also prevent any disturbance to macroeconomic stability."

The syndicate plans to subdivide the land into residential, commercial, industrial, and agro-residential plots. These will be sold primarily to Zimbabweans in the diaspora or locals with access to foreign currency. The mortgage loans to be offered will be under soft terms, designed to encourage uptake and ensure affordability.

According to the proposal, about 1.1 million houses will be constructed on 300,000 hectares of the converted land, while the remaining 200,000 hectares will be allocated for commercial, industrial, and mixed-use purposes.

Time Bank said the project will be driven by a syndicate of 100 banks and investment companies, subject to written agreements between all parties. Private firms with sufficient capacity to participate in the compensation and development process would also be allowed to join the syndicate, provided they partner with a licensed financial institution.

The bank emphasised that the syndicate would equitably share the total loan value of US$38 billion, reinforcing the collaborative nature of the financing and implementation structure.

While the proposal represents one of the largest ever private-sector driven debt settlement initiatives in Zimbabwe, the response from the Treasury has so far been muted. Time Bank is pressing for formal engagement and legal backing to push the deal forward, while highlighting that the approach offers a self-financing solution to one of Zimbabwe's most entrenched fiscal challenges.